PRAKASH P. MALI, MUMBAI V. DCIT CENT. CIR. 4(4), RANGE -4, MUMBAI

ITA 2179/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9061 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 02-01-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UMANG SHAH
• Keywords: Income from undisclosed sources; Valuation report
• Section: 143(3); 153A; 14A; 68; 132

Judgement Text

1 , INCOME-TAX APPELLATE TRIBUNAL -JBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND PAWAN SINGH,JUDICIAL MEMBER ./ITA/2179-80/MUM/2016 , /ASSESSMENT YEARS:2001-02&03-04 MR. PRAKASH P. MALI, PROP. OF M.S. JUNCTION, 33, ASHISH INDL. ESTATE, GOKHALE ROAD (S), DADAR (W),MUMBAI 400 025. PAN : ADSPM1174C / VS. ACIT (OSD-I), CIRCLE-7,R.NO.409, AAYAKAR BHAVAN,MAHARSHI KARVE ROAD, MUMBAI 400 020. ( /APPELLANT ) ( / RESPONDENT) ./ITA/2185/MUM/2016 , /ASSESSMENT YEAR:2007-08 MR. SAMRATHMAL P. MALI, 27, 2ND FLOOR, MANTRI CORNER BLDG., OPP. SWARAJ RESTAURANT, PHADKE CHOWK, GOKHALE ROAD,DADAR (W), MUMBAI-25. PAN : AAHPM6079Q / VS. ACIT (OSD-I), CENTRAL RANGE 7, 413, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI 400 020. ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: MS.ANUKRISHNA AGARWAL ASSESSEE BY: SHRI UMANG SHAH / DATE OF HEARING: 02.01.2017 / DATE OF PRONOUNCEMENT: 02.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) -PER RAJENDRA,AM: CHALLENGING THE ORDERS OF THE CIT (A)-40,MUMBAI, AS SESSEES HAVE FILED APPEALS FOR THE ABOVE- MENTIONED AY.S. AS THE ISSUES INVOLVED IN ALL THE A PPEALS ARE COMMON AND DEAL WITH IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT, SO,WE ARE ADJU DICATING ALL THE APPEALS BY A SINGLE COMMON ORDER FOR THE SAKE OF CONVENIENCE.THE DETAILS LIKE DATES OF PENALTY ORDERS, AMOUNTS OF PENALTY IMPOSED AND THE DATES OF ORDERS OF THE CIT (A) CAN BE SUMMARISED AS UNDER: ASSESSEE AY. PENALTY ORDER DT. PENALTY LEVIED CIT(A)ORDER DT. PRAKASH M MALI 2001 - 02 29.11.2013 23,520/ - 26/09/2013 PRAKASH M MALI 2003 - 04 03.12.2013 67,200/ - 26/09/2013 SAMATH M MALI 2007 - 08 26.03.2014 1,83,315/ - 15/01/2016 ITA.S/2179-80/MUM/2016-AY.S.2001-02 & 2003-04: BRIE F FACTS: 2. AN ACTION U/S. 132 (1) WAS TAKEN IN THE CASE OF MEM BERS OF THE MALI FAMILY, INCLUDING THE ABOVE-MENTIONED TWO ASSESSEES. THE ASSESSING OFFICE RS (AO.S) IMPOSED PENALTY U/S. 271(1)(C)OF 2 THE ACT,FOR CONCEALING THE PARTICULARS OF INCOME AN D FURNISHING INACCURATE PARTICULARS FOR THE ABOVE-MENTIONED AY.S. AGGRIEVED BY THE ORDERS OF TH E AO.S THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA), WHO CON FIRMED THEIR ORDERS. THE TRIBUNAL REVERSED THE ORDERS OF THE FAA AND DELETED THE ADDITIONS. IN THE MEANWHILE, THE AO.S LEVIED PENALTIES FOR BOTH THE YEARS, AS STATED EARLIER. THE FAA CONFIRME D THE ORDERS OF THE PENALTY. 3. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE (AR) REFERRED TO THE ORDER OF THE TRIBUNAL DATED 14/01/2016 (ITA/1730/M/ 2003-AY. 2007-08 AND ITA.S/7 TO 82- 84/M/2013 AND ITA/7405/M/2013,AY.S 2001-02 TO 2004- 05)AND STATED THAT CONSIDERING THE ORDER OF THE TRIBUNAL PENALTY ORDER SHOULD BE QUASH ED.THE DEPARTMENTAL REPRESENTATIVE (DR) LEFT ISSUE TO THE DISCRETION OF THE BENCH. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE ORDERS OF THE TRIBUNAL(SUPRA) AND SAME READ AS UNDER: 3.BRIEFLY STATED RELEVANT FACTS IN THIS REGARD AR E THAT THERE A SEARCH ACTION U/S 132 OF THE ACT WAS CONDUCTED IN THE MALI GROUP OF CASES ON 28.6.2006. HOWEVER, THERE WAS NO SEIZURE OF ANY KIND IN THE HANDS OF THE ASSESSEE. HOWEVER, ASSESSEE WAS SI GNATORY TO THE DECLARATION U/S 132(4) OF THE ACT AMOUNTING TO RS. 75 LAKHS. THE SAID DISCLOSURE WAS DIVIDED AMONG FIVE BROTHERS [IE (I) SHANKARLAL P MALI; (II) SAMARTHMAL P. MALI; (III) C HUNNILAL P. MALI; (IV) BHAGARAM P. MALI AND (V) PRAKASH P. MALI] OF THE MALI GROUP. RS. 5 LAKS H WAS ALLOCATED FOR THE PRESENT ASSESSEE AS PER THE STATEMENT ACKNOWLEDGED BY THE ASSESSEE ON 29.6. 2006 BY PUTTING HIS SIGNATURES. QUESTION NO.18 OF THE STATEMENT OF SHRI SHANKARLAL P. MALI R ECORDED ON 29.6.2008, SUPPORTS THE ABOVE. RELEVANT DISCUSSION IS GIVEN IN PARA 7 OF THE CIT ( A)S ORDER. SUBSEQUENTLY, ASSESSEE FILED AN AFFIDAVIT ON 23.12.2008 AND INFORMED THAT NO ADDITI ONAL INCOME IS REQUIRED TO BE DISCLOSED IN HIS NAME. THEREFORE, WITHOUT OFFERING THE SAID AMOUNT OF RS. 5 LAKHS, ASSESSEE FILED THE RETURN OF INCOME. AO DID NOT ACCEPT THE SAME AND PROCEEDED T O ADD THE SAID AMOUNT OF RS. 5 LAKHS IN THE HANDS OF THE ASSESSEE. HOWEVER, AO DID NOT MENTION ED ABOUT THE RELEVANT FACTS IE REST OF THE FOUR BROTHERS OFFERED THE SAID AMOUNT OF RS. 4 LAKHS IN THEIR HANDS. THE CONTENTS OF PAGE 16 OF THE PAPER BOOKS ARE RELEVANT IN THIS REGARD. THIS PAPE R DEMONSTRATES THE TAXING OF THE SAID RS. 75 LAKHS, ORIGINALLY OFFERED IN THE HANDS OF THE REST OF THE FOUR BROTHERS. ON THESE FACTS, AT THE END O F THE ASSESSMENT PROCEEDINGS, AO COMPLETED THE ASSESS MENT AFTER MAKING A COUPLE OF ADDITIONS ON ACCOUNT OF UNEXPLAINED JEWELLERY AND THE SAID AMO UNT OF RS. 5 LAKHS. ON APPEAL, CIT (A) DELETED THE ADDITION OF RS. 1 LAKH MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY AND CONFIRMED THE ADDITION OF RS. 5 LAKHS. IN THE BACKGROUND OF THE A BOVE FACTS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THIS IS A CASE OF UNABATED ASSESS MENT, RE-OPENED U/S 153 OF THE ACT FOR TAXING THE UNACCOUNTED INCOME, IF ANY. THE OTHER FACTS IN CLUDE THAT THERE WAS NO SEIZURE IN THE CASE OF THIS ASSESSEE AND THERE IS NO INCRIMINATING MATERIA L SEIZED INVOLVING THE ASSESSEE. ASSESSEE DOES NOT HAVE ANY INCOME FROM BUSINESS. HIS INCOME IS O NLY FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES. FURTHER, IT IS A FACT THAT THE SUM OF RS. 5 LAKHS, WHICH WAS ORIGINALLY OFFERED IN THE HANDS OF THE ASSESSEE WAS EVENTUALLY TAXED IN THE HANDS O F THE REST OF THE FOUR BROTHERS NAMELY (I) SHANKARLAL P MALI; (II) CHUNNILAL P. MALI; (III) BH AGARAM P. MALI AND (IV) PRAKASH P. MALI. THEREFORE, MAKING THE ADDITION OF RS. 5 LAKHS ONCE AGAIN IN THE HANDS OF THE ASSESSEE WILL CONSTITUTE DOUBLE ADDITION, WHICH IS UNSUSTAINABLE IN LAW. FURTHER, WE FIND THE ADDITION OF RS. 1 LAKHS MADE ON ACCOUNT OF JEWELLERY WAS FINALLY DELE TED BY THE CIT (A), AGAINST WHICH THE REVENUE 3 IS NOT IN APPEAL. THEREFORE, THE ADDITION MADE BY THE AO IN THE ASSESSMENT IS NOT BASED ON ANY INCRIMINATING MATERIAL OR ANY LEGALLY SUSTAINABLE G ROUNDS. IN SUCH CIRCUMSTANCES, RE-OPENING THE NON-ABATED ASSESSMENT IS NOT SUSTAINABLE. THEREFORE , WE TAKE STRENGTH FROM THE NUMBER OF JUDGMENTS BY THE VARIOUS HONBLE HIGH COURTS AS WEL L AS THE ORDERS OF THE TRIBUNAL AND THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. IDEAL APPLIANCES CO. PVT. LTD VS. DCIT IS ONE OF THE, WHEREIN ONE OF US (AM) IS A PARTY TO THE OR DER. CONSIDERING THE SIGNIFICANCE AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, RELEVANT PARAS FROM THE SAID TRIBUNALS ORDER IN THE CASE OF M/S. IDEAL APPLIANCES CO. PVT. LTD (SUPRA) ARE S AME ARE EXTRACTED AS UNDER:- 7.WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL IN THE CASE OF SHRI GOVIND AGARWAL V. ACIT BEING ITA NO: 3389/ M UM / 2011 DATED 10.01.2014 (SUPRA); ALL CARGO GLOBAL LOGISTICS V . ADDL . CIT (SUPRA); SKS ISPAT AND POWER LIMITED VS. DCIT CC 45 (ITA 8746/M/12 AND ITA 8747/M/12) (SUPRA) AS WELL AS THE JUDGMENT OF THE HONBLE BOMBAY HIGH COU RT IN THE CASES OF CIT V. ALL CARGO GLOBAL LOGISTIC (374 ITR 645) (SUPRA), COPIES OF WHICH ARE PLACED ON RECORD. ON PERUSAL OF THE SAID DECISIONS, WE FIND THEY ARE RELEVANT FOR T HE PROPOSITION THAT WHEN NO ASSESSMENT HAS ABATED, THE QUESTION OF MAKING ANY ADDITION OR MAKI NG DISALLOWANCE WHICH ARE NOT BASED ON ONLY MATERIAL FOUND DURING THE SEARCH IS BAD IN LAW. I N THIS REGARD, WE FIND IT RELEVANT TO EXTRACT THE RELEVANT PARAS FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI GOVIND AGARWAL (SUPRA) AND THE SAME IS AS FOLLOWS: 12.WE HAVE HEARD THE PARTIES AND THEIR DIVERGENT S TANDS ON THE LEGAL ISSUE AND THE VALIDITY OF THE INSTANT ASSESSMENT/REASSESSMENT WIT H THE ROUTINE ADDITIONS U/S 68 AND SECTION 14A OF THE ACT BASED ON THE ACCOUNTED TRANS ACTIONS. THE INSTANT CASE FOR THE AY 2002-03 DEALS WITH THE CASE OF DISTURBING THE COMP LETED ASSESSMENT. EARLIER THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. COM PLETENESS OF THE SUMMARY ASSESSMENT IS CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE VIDE MANY JUDGMENTS CITED ABOVE. IN THE ASSESSMENT U/S 153A, THE AO MADE (I) ADDITION U/S 68 ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE DULY DISC LOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,070/-; AND (II) DISALLOWANCE U/S 14A: RS. 23,31,469/-. ADMITTEDLY, THERE IS NO INCRIMINATING MATERIAL BEFORE THE AO TO SUPPORT THE ABOVE ADDITIONS. THE VALUATION REPORT, WHICH IS GARNERED BY THE AUTHORITIES CONSTI TUTES MERE ESTIMATES AND THE PROVISIONS OF SECTION 132 IS NOT REQUIRED TO OBTAIN SUCH REPOR T FROM THE DVO. AS SUCH, FOR MAKING AFORESAID ADDITIONS OF RS 31,33,070/-, AO HAS NOT U SED EVEN THE SAID VALUATION REPORT AND THE AO DISALLOWED WHAT IS REPORTED IN THE BOOKS. SI MILAR IS THE CASE WITH THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, UNDISPUTEDLY, THE IMPUGN ED QUANTUM ADDITIONS ARE MADE MERELY BASED ON THE ENTRIES IN THE ACCOUNTED BOOKS AND CERTAINLY NOT BASED ON EITHER THE UNACCOUNTED BOOKS OF ACCOUNTS OF THE ASSESSEE OR BO OKS NOT PRODUCED TO THE AO EARLIER OR THE INCRIMINATING MATERIAL GATHERED BY THE INVES TIGATION WING OF THE REVENUE. CONSIDERING THE LEGAL PROPOSITIONS PLACE BEFORE US BY THE ASSESSEES COUNSEL, WE ARE OF THE OPINION, SUCH ASSESSMENTS OR ADDITIONS ARE UNSU STAINABLE IN LAW. 13. FOR THE SAKE COMPLETENESS OF THE ASSESSEE, WE I NSERT HERE SOME OF THE EXTRACTS FROM RELEVANT JUDGMENTS AND THEY ARE: A. [2013 36 TAXMANN.COM 523 (RAJASTHAN) IN THE CASE OF JAI STEEL (INDIA) VS. ACIT - FROM HELD PORTION: .THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UND ER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A, INASMUCH AS , IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THE N THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE , WHICH WOULD REQUIRE MORE REITERATION AND IT 4 IS ONLY IN THE CONTEXT OF THE ABATED ASSESSMENT UND ER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. ....... ....... PARA 26 OF THE JUDGMENT: THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT Y EARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF TH E ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WO ULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FO R THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. B. [2012] 28 TAXMANN.COM 328 (MUMBAI TRIB.) IN THE C ASE OF GURINDER SINGH BAVA VS. DCIT . WHETHER SINCE ASSESSMENT UNDER SECTION 153A WAS PA SSED BY ASSESSING OFFICER ON BASIS OF MATERIAL AVAILABLE IN RETURN OF INCOME AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AND SINC E NO ASSESSMENT WAS ABATED, ASSESSMENT UNDER SECTION 153A WAS TO BE QUASHED BEI NG MADE WITHOUT JURISDICTION AVAILABLE UNDER SECTION 153A - HELD, YES [PARA 6.2] [IN FAVOUR OF ASSESSEE] PARA 6.1 OF THE ORDER: THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LO GISTICS LTD. (SUPRA), HAS HELD THAT PROVISIONS OF SECTION 1 53A COME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003 AND ON SAT ISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQU IRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RET AINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESS MENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSE SSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATI NG MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSM ENT UNDER SECTION 153A CAN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE C OURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED I NCOME OR PROPERTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSE SSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE , WHERE THERE WAS NO ASSESSMENT PENDING, IN THIS CASE AND, IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT . THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMI NATING MATERIAL FOUND DURING SEARCH. B. ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-44 [2012] 23 TAXMANN.COM 103 (MUM.) (SB) PARA 58 OF SB DECISIONS: THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UNDER : 5 (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH AS SESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY ; (B) IN OTHER CASES , IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN A SSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL , WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS - (I) BOOK S OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 14. THUS, IN CASE OF THE COMPLETED ASSESSMENTS EITH ER U/S 143(1) OR 143(3), THE ABOVE EXTRACTS ARE UNIFORM IN ADVOCATING AGAINST MAKING A DDITIONS IN ROUTINE MANNER IN THE ASSESSMENTS MADE U/S 153A OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL GATHERED IN THE SEARCH ACTION. STATUTORY NOTICE U/S 153A OF THE ACT CAN ALSO BE ISSUED TO REITERATE THE RETURNED INCOME OR FOR MAKING ADDITIONS BASED O N THE INCRIMINATING MATERIAL OR UNPRODUCED BOOKS OF ACCOUNT. OTHERWISE, ADDITIONS MADE IN ROUTINE MATTER AS IN THE PRESENT APPEAL ARE NOT SUSTAINABLE. FURTHER, FOR T HE SAKE COMPLETENESS OF THE ORDER, WE HAVE PERUSED THE ORDERS/JUDGMENTS RELIED UPON BY LD DR FOR THE REVENUE AND FOUND THEY ARE DISTINGUISHABLE ON FACTS FOR ONE REASON OR OTHER. TO START WITH, WE HAVE PERUSED THE JUDGMENT OF HONBLE HONBLE DELHI HIGH COURT IN THE CASE OF MADUGULA VENU (SUPRA) AND FIND THAT, THOUGH EXPLAINED THE PROVISIONS IN P LAIN LANGUAGE, IT DOES NOT DEALT WITH THE RELEVANCE OR FACTUM OF INCRIMINATING MATERIAL. FURTHER, THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA (SUPRA) IS NOT ON THE NOTICES ISSUED U/S 153A OF THE ACT AND THE SAME IS PRONOUNC ED IN THE CONTEXT OF THE NOTICE U/S 153C OF THE ACT. FURTHER, ALSO, THE COORDINATE BEN CH DECISION IN THE CASE OF SCOPE (P) LTD (SUPRA) HAS GRANTED RELIEF TO THE ASSESSEE THOUGH THE NOTICE ISSUED U/S 153A OF THE ACT WAS UPHELD. HOWEVER, THIS ORDER HAS NOT CONSIDERED THE THEN EXISTING DECISION OF THE COORDINATE BENCH DECISION IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) WHICH IS RELEVANT FOR THE PROPOSITION THAT THE COMPLETED ASS ESSMENT MAY NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SPECIFIC TO T HE ASSESSEE. IN FACT, ALL THESE JUDGMENTS TAKE SPIRIT FROM THE SPECIAL BENCH DECISI ON IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA), WHICH IS RELEVANT FOR THE PROPOSITION THA T THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL SUCH AS BOOKS OF ACCOUNTS, OTHER DOCUMENTS FOUND IN THE SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF THE SEARCH. 15. ....... 16. IN THESE CIRCUMSTANCES, WE HAVE NO DOUBT ABOUT THE ABSENCE OF ANY SEIZED MATERIAL WHICH ARE INCRIMINATING IN NATURE TO BACK THE ADDITIONS U/S 68 OR 14A OF THE ACT MADE IN THE ASSESSMENT MADE U/S 153A OF THE ACT FOR THE AY UNDER CONSIDERATION. REGARDING THE DVOS REPORT GATHERED DURING THE SEAR CH ACTION, WE FIND THAT THE REPORT SUFFERS FROM CERTAIN DEFICIENCIES QUA COST OF CONST RUCTION OF RESIDENTIAL PROPERTY AND THE LAND OBTAINED THERETO. THE SAID REPORT CONSTITUTES AN OPINION OF THE THIRD PARTY WHICH CANNOT BE USED BY THE AO FOR MAKING ADDITIONS AND S UCH ADDITIONS, IF ANY, CANNOT BE SUSTAINED LEGALLY. AS SUCH, WE FIND THAT THE AO HA S NOT USED THE SAID REPORT OF THE DVO ALSO FOR MAKING ADDITIONS OF RS. 31,33,007/-, THE D IFFERENCE BETWEEN ACCOUNTED AMOUNT OF RS. 46,13,007/-, CLAIMED AS THE AMOUNT SPENT ON CON STRUCTION OF HOUSE AND ACQUISITION OF LAND AS ON 31.3.2002 MINUS RS. RS. 14.8 LAKHS, THE INVESTMENT MADE ON THE LAND PLOTS. AO MADE ADDITION FOR ASSESSEES FAILURE TO PROVIDE EVIDENCES / BILLS IN SUPPORT OF THE CLAIM OF EXPENDITURE ON THE CONSTRUCTION. IT THE P RESUMPTION OF THE AO THAT THE PLOTS SINCE ACQUIRED ONLY BY JULY 2001, THE ASSESSEE WOUL D NOT HAVE SPEND RS. 31,33,007/- BY 6 31.3.2002. THIS IS MERELY A PRESUMPTION RATHER CON CLUSION BASED ON ANY EVIDENCES. SUCH ADDITIONS ARE UNSUSTAINABLE IN LAW IN THE ASSESSMEN TS MADE U/S 153A R.W.S 143(3) OF THE ACT. 17 . RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI ST EEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONED THAT THE REQUIRE MENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION (153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF T HE CONCLUDED ASSESSMENTS DOES NOT ARISE, WHICH WOULD MORE REITERATION.. THUS, T HE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISIONS OF THE TRIBUNAL ARE CATEGORICAL IN CONCLUDING THAT, IN CASE OF THE CONC LUDED ASSESSMENTS LIKE THE PRESENT ONE, THE ADDITIONS ARE MADE ONLY BASED ON THE INCRIMINAT ING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE FACTS OF THE JAI STEEL LTD (SUPR A) ARE IDENTICAL TO THE PRESENT ONE IE AO MADE ADDITIONS BY REASSESSING U/S 153A ON THE COMPL ETED ASSESSMENT U/S 143(1) OF THE ACT. THUS, CONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STEEL LTD (SUPRA), THE ARGUMENTS ON THE LEGAL ISSUE RAISED BEFORE US STAND S COVERED. THEREFORE, CONSIDERING THE RAJASTHAN HIGH COURTS JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE ISSUE OF NOTICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE IMPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INCRIMINATING MATERIALS. IN THE ABSENCE OF INCR IMINATING MATERIAL, THE ROLE OF THE AO IS ONLY TO REITERATE THE RETURNED INCOME FILED IN R ESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE R AISED IN THE GROUNDS FOR BOTH THE APPEALS OF THE ASSESSEE (ITA NO 3389&3390/M/2011) I S ALLOWED . 4.FURTHER, IN THE RECENT PAST, SIMILAR ISSUE WAS AD JUDICATED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA VIDE ITA NOS. 707/2014 AND OTHERS, DATED 28.8.2015 , WHEREIN THE HONBLE DELHI HIGH COURT HAS REITERATED THE ABOVE S ETTLED LEGAL PROPOSITION THAT SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. IN THIS REGARD, WE FIND IT RELEVANT TO EXTRACT TH E SUMMARY OF THE LEGAL PROPOSITIONS AND THE CONCLUSION OF SAID JUDGMENT OF THE HONBLE DELHI HIGH COURT WHICH IS AS FOLLOWS: SUMMARY OF THE LEGAL POSITION: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTI ONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PER SON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING T HE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN 7 WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPL ETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. FROM THE ABOVE SETTLED LEGAL POSITION OF THE ISS UE THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH, ADDITIONS MADE ON THE ASSESSED INCOME ARE UNSUSTAINABLE IN LAW, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITIONS MA DE IN THE INSTANT CASE ARE NOT SUSTAINABLE AND ACCORDINGLY, WE DELETE THE SAME. ACCORDINGLY, THE GROUNDS ORIGINALLY RAISED BY THE ASSESSEE ARE ALLOWED. AS THE TRIBUNAL HAS DELETED THE ADDITIONS IN THE QU ANTUM APPEAL, THEREFORE, THE PENALTY ORDERS WOULD NOT SURVIVE.THE EFFECTIVE GROUND OF APPEAL, F ILED BY THE ASSESSEE, STANDS ALLOWED. ITA/2185/M/2016,AY. 2007-08: 5. FACTS OF THE CASE UNDER CONSIDERATION ARE SIMILAR T O THE FACTS OF THE BROTHER OF THE ASSESSEE I.E. PRAKASH P MALI. FOLLOWING OUR ORDER, IN THAT CASE, WE REVERSE THE ORDER OF THE FAA AND DELETE THE 8 PENALTY LEVIED BY THE AO AND CONFIRMED BY THE F AA. EFFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEALS FI LED BY THE ASSESSEES STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND ,JANUARY,2017. 2 , 2017 SD/- SD/- ( / PAWANSINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.